Private Company Shareholders

Companies may develop their business in a number of ways. They may take in additional equity investment and shareholders through raising funds from venture capitalists, business angels or “friends and family”. They may also look to separate parts of a business into separate companies through a demerger or other reorganisation so that a core business can develop without hindrance from a non-core business. Oh, and sometimes shareholders fall out.

How can we help?

Introducing new shareholders to your business is likely to involve a number of different considerations. In particular it is probably going to involve a shift in the balance of power of control. This may be the right time to update your, or even introduce, a shareholders' agreement.

If you are actively seeking new investors, you will need to be aware of what you can say and how you can say it to potential investors – this is known as the financial promotion regime. You may also find that potential investors ask for warranties and indemnities from the company, and possibly its directors, before committing funds to the company. Potential investors may also ask for certain undertakings as to the way you carry on business after investing. We can advise you on what is and what is not reasonable to expect.

On occasions you may find that the businesses carried on by your company would be better carried on by two or more companies owned by your shareholders or groups of your shareholders. There are a number of tax efficient ways to organise breaking up – demerging - a business like this. We can help you with the legal steps to implement a demerger and with the practical consequences that follow.

Sometimes you fall out with some or all of your shareholders. Using a combined team of corporate finance and dispute resolution lawyers, we can work with companies or disillusioned shareholders to identify practical ways to address the dispute and to look to resolve it in as simple and straightforward a manner as possible. This might involve facilitating the mediation of a dispute, negotiating an exit for a shareholder or exercising rights under agreements or legislation.

Our private company shareholder services

• Advising on shareholders' agreement
• Advising on raising equity share capital and investment agreements
• Advising on demergers and other forms of corporate reconstructions and reorganisations
• Advising on shareholder disputes including in relation to unfair prejudice to minority shareholders